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There is a segment of the U.S. auto market where nary a dollar is spent on incentives to move the metal and billions of dollars stand to be made.

Even more surprising are this segment's loyal, young, male, affluent consumers, who are willing to spend thousands of dollars on sexy wheel-tire packages, tighter suspensions and high-powered engines without batting an eye.

And auto makers, from the mass-market Big Three to the Euro-lux manufacturers, are lining up for a piece of the action. It's the business of performance, and it's heating up across the globe.

Some of these models are muscle cars with bigger engines and louder exhaust, while others almost could be classified as stand-alone products due to their extensive modifications.

U.S. auto makers are toying with various strategies for entering the performance-vehicle arena, with some copying the German brands that built the market into what it is today.

BMW AG and its German competitor DaimlerChrysler AG's Mercedes-Benz set the foundation for the business. BMW's M (for "Motorsport") unit launched its E12 in 1979, and Mercedes' AMG marketed its first vehicle, the C36 AMG, in 1995. Since then, the two have cornered the performance market and held a tight grip on its customer base.

"To drive a car is not only to go from point A to point B. It is also to have fun, and if you offer a product which has more fun, you can get more money for it," Ulrich Bruhnke, president of BMW's M GmbH says in explaining the formula. "The M products are not sold - the customers buy these cars. They know these cars very well in every detail."

Like other segments where profitability is high and sales are sizzling, competitors now are looking for a piece of the action.

Chrysler Group is among the most aggressive mass-market auto makers, with its Street and Racing Technologies (SRT) unit. It is home to about 150 engineers tasked with developing performance offshoots of mainstream Chrysler products.

Chrysler is so dedicated to keeping SRT focused on its core business that the team is housed away from the auto maker's Auburn Hills, MI, headquarters.

"One thing about the (engineers) on our team, they have SRT stamped on their ass," says Dan Knott, director of Chrysler's SRT business.

# posted by Medical Information : 5:33 AM